The Strategic Meaning of China-ROK Relations

The growing ties between China and the Republic of Korea are among the most consequential changes in East Asian politics, economics, and security of the past several decades. From modest beginnings in 1992 when Beijing formally accepted the reality of two Koreas rather than one, China and the ROK have built an increasingly diversified and interactive relationship, now described by both leaderships as pursuit of “a matured strategic cooperative partnership.” By numerous measures—meetings between senior officials, trade and investment, social, cultural, and educational exchanges, and high levels of public support in both countries—relations have progressed to levels unimaginable only a few years ago. The personal connection between President Xi Jinping and President Park Geun-hye evident during their state visits to each other’s capitals in 2013 and 2014 further attests to this forward momentum.

Will the growth of China-ROK relations entail larger strategic consequences, as distinct from the broad management of overlapping economic and political interests? Are there inherent limitations under conditions of a still divided peninsula, or do the two leaderships attach intrinsic value to their mutual ties both before and after unification? At a time when China’s relations with many regional neighbors are badly frayed and in several cases could prove confrontational, Beijing’s rapprochement with Seoul is a conspicuous exception. How congruent are the interests and expectations of both countries? What will determine the scope and scale of longer term ties, and what are the possible challenges to the durability and scope of relations?

Current ties between Beijing and Seoul involve far more than the management of bilateral relations. Though neither capital is yet prepared to fully acknowledge larger possibilities, the links between the two speak to a quiet but inexorable strategic transformation in Northeast Asia. China is a reemerging world power, and South Korea is a robust and increasingly capable actor positioned at the epicenter of, arguably, the globe’s most important region. The advances in China-ROK relations have not undermined the US-Korea alliance; if anything, they have increased Seoul’s incentives to reinforce security ties with Washington. At the same time, the China-ROK relationship affords growing possibilities for facilitating the peninsula’s ongoing transition and provides a potential channel for crisis management, though these larger possibilities have yet to be tested.

Economic foundations

Bilateral trade dominated the first decade of full state-to-state relations. The conferring of legitimacy and sovereignty by its Korean War adversary (and still Pyongyang’s nominal treaty ally) provided ample validation for Seoul, though the political relationship remained circumscribed. The parallelism between Deng Xiaoping’s developmental model and the state-centered path pursued under Park Chung-hee in earlier decades further enhanced the logic of Sino-ROK accommodation. In 1985, seven years before the normalization of relations, China’s trade with South Korea had already surpassed its two-way trade with the North; it is now approximately 40 times the level of trade between China and the DPRK.

Complementary economic interests became far more pronounced following China’s entry into the WTO in 2001 and Beijing’s unambiguous pursuit of export-led growth. In 2003, China became the ROK’s largest trading partner, with South Korea’s exports to China exceeding imports from China by ever increasing margins. As investment began to grow, the ROK’s commitments in China far outstripped the more modest undertakings of Chinese companies in Korea. In 2005, two-way trade surpassed USD 100 billion and in 2011 it exceeded USD 200 billion. According to Chinese estimates, trade reached nearly USD 275 billion in 2013, with an agreed-upon target of USD 300 billion for the end of 2015, though recent declines in South Korean exports make this goal somewhat less certain. But this latter objective would approach the level of China’s 2013 trade with Japan (USD 315 billion), a remarkable development given Japan’s decades-earlier entry into the Chinese market and the far larger size of the Japanese economy. South Korea’s trade with China already exceeds its combined trade with Japan and the United States. Though some observers note that these transactions frequently involve processing trade rather than deeper economic integration, Korea’s inroads into the Chinese market are inescapable, and attest to the shifting center of economic gravity for South Korea. Both states have also pledged to complete negotiations on an FTA by the end of 2014, which is likely to appreciably facilitate trade and investment.

The shadow of North Korea

China’s diminished relations with North Korea continue to shape the political and strategic contours of China-ROK relations. Not surprisingly, this dimension of relations between Beijing and Seoul has taken much longer to develop than trade ties. Following the first nuclear crisis, the death of Kim Il-sung, and the negotiation of the Agreed Framework, China sought to maintain the semblance of working relations with Pyongyang. In the early 2000s, Beijing’s role as convener and host of the Six-Party Talks and periodic facilitator of US-DPRK diplomacy elevated China’s prominence in peninsular affairs. This process enabled increased Chinese contact with senior ROK officials and diplomats, resulting in a closer relationship between both governments. But potent political constituencies in China (especially in the party and the military) remained protective of the historical relationship with the DPRK and wary of US strategic intentions on the peninsula. From the mid-2000s, Beijing again increased trade and economic assistance to the North, calculating that a successor leadership would ultimately pursue an internal economic transition and more normal relations with the outside world.

China’s growing alienation from North Korea in the aftermath of Kim Jong-il’s death and the ascension of Kim Jong-un has accelerated the accommodation process with Seoul; it also correlates closely with Xi Jinping’s advance to the top position in Beijing. Though officials are loath to openly compare relations with the two Koreas, the asymmetries are inescapable. An open, globalized South is increasingly committed to deeper ties with Beijing while a defiant, nuclear-armed North resents its dependence on its erstwhile ally and fears the consequences of a more open economy. China is not prepared to jettison its ties with the North for fear of triggering a larger crisis, but Pyongyang remains unwilling to accommodate to Chinese expectations. Through open estrangement between Beijing and Pyongyang has yet to transpire, Beijing no longer reflexively defers to the North’s preferences, enabling China to more vigorously explore longer term possibilities with Seoul.

These developments were much in evidence during Xi Jinping’s state visit in July 2014. Xi was accompanied by a full array of senior officials and several hundred leading entrepreneurs, with both sides professing a shared commitment to “respect the other’s social system, development model and core interests.” One Chinese commentary argued that there had been a “comprehensive upgrading” of ties with Seoul, describing the prevailing conditions as “hot in economy, warm in politics.” Immediately prior to Xi’s visit, a prominent Chinese academic argued inPeople’s Daily that the China-ROK relationship had assumed “global strategic significance,” further contending that “South Korea plays a crucial role in maintaining peace, stability, and denuclearization on the peninsula. The world has placed too much emphasis on US-DPRK relations or China-US relations, and has given inadequate attention to the role of South Korea. Now we have to update our understanding.”

Though these judgments might have reflected an overly effusive mood of the moment, they convey the enhanced value of the ROK to Chinese interests. Beijing no longer sees the need to choose between the two Koreas, and prevailing sentiment within China increasingly views the South as an asset and the North as a liability determined to frustrate Beijing’s policy goals. At the same time, China’s increasing distance from North Korea is an objective indicator of its fundamental interests, which ineluctably enhances the importance of the ROK to Beijing. Though there is as yet no definitive alteration in China’s dealings with the DPRK, without major changes in North Korean strategy, the gravitational pull in Chinese policy on the peninsula continues to move in Seoul’s direction.

Which interests and which policy paths might dominate China’s future orientation toward the two Koreas? China still does not preclude a more evolutionary process in North Korea, but it no longer assumes one, and it does not seem optimistic about the prospects. If North Korea fails to change its policy direction and proves able to sustain its strategic goals (in particular an operational nuclear weapons capability, including the means of delivery), China will confront a fundamental policy choice about the viability of its relationship with the DPRK. A discreet but portentous debate might then begin within China on the possibilities of “Seoul led” unification.

The United States would prefer to envision Sino-American consultations on a question of such profound importance to the Northeast Asian future. China’s natural gravitation toward major power relationships (in particular with the United States) seems plausible under such circumstances, but it is not beyond imagination that it would deem the ROK its interlocutor of first choice. This moment has yet to arrive, as evidenced by the lack of Chinese reference to Park’s declared unification strategies during Xi’s state visit, but it is inconceivable that China has failed to weigh these longer term possibilities. In the event that unification becomes a more realistic prospect, the future will increasingly depend on how two considerations interact: Seoul’s vision of its long-term strategy, and the strategic weight that China is prepared to accord to South Korea as unification approaches.

Toward a bridging strategy

South Korea is in no way oblivious to the strategic implications of an increasingly powerful China. There is a lively ongoing debate within Korean strategic circles reflecting this reality. The ROK calculates that vesting China in an ever larger and increasingly diversified set of relations, beginning with trade and investment but extending to the full spectrum of political and strategic concerns, is the most prudent and productive path that it can follow. But it is premised on an undiminished alliance with the United States, without which Seoul would be unable to interact with China in full confidence. Not unlike US China policy, the viability of Korea’s strategy depends on China’s longer term political, economic, and security evolution. For Seoul, its geographic proximity to China and its modest size relative to its much larger neighbor defines the essential requirements of national strategy. China will always be South Korea’s near neighbor in a divided peninsula and it will be its direct neighbor following unification. The operative tests for it are thus twofold: will China accord Korea full status as a major middle power, and will the ROK successfully impart to Beijing what its core national interests are not negotiable? These issues underlie the ongoing dynamics in relations between both states.

Seoul clearly understands its distinctive “in between” strategic position. A bridging strategy that attaches enduring importance to relations with the United States while enhancing Korea’s strategic identity and interests through closer ties with China seems self-evident. Its leaders have concluded that the congruence of interests between South Korea and China far outweighs the risks. Support for the relationship, though not unambiguous within South Korea, is broadly held across the political divide. The warier voices (also expressed by American and Japanese critics of the ROK’s accommodation with China) fear that Seoul is on a slippery slope that will ultimately envelop Korea in a China-centered political and economic order that will undermine America’s dual alliance arrangements in Northeast Asia.

The ROK discounts these concerns and rejects the zero sum argument that it must make a choice between China and the United States. The continued enhancement of Chinese-Korean relations has been at no discernible cost to the US-ROK alliance, which has rarely if ever seemed closer than at present. Claims that China’s larger goal is to degrade Seoul’s alliance with Washington have no validity so long as Korea unambiguously conveys its first order strategic interests to Beijing. The Chinese, for example, have expressed clear objections to continued US-ROK military exercises on the peninsula and to pending possibilities of enhanced US missile defense deployments there. There is every reason to conclude that the ROK will determine its interests and preferences in both areas and (should Beijing raise objections) fully defend its policy decisions, which are not directed at China.

Korea’s relations with Japan necessarily represent a more complex case. China and South Korea have both put forward heated objections to the policies of the Abe administration, in particular the prime minister’s equivocal stance on Japan’s earlier acknowledgments of its wartime conduct and his advocacy of collective self-defense and an expansion of Japan’s security role. Japan was conspicuous by its absence from the PRC-ROK Joint Statement issued during Xi’s state visit, which focused exclusively on the enhancement and institutionalization of bilateral relations. However, in his speech at Seoul National University, Xi made extended reference to shared historical antipathies toward Japan, thereby seeking to establish common cause with Seoul. Xi’s open effort to exploit Korea’s shared objections to present-day Japanese policy (no matter how deeply felt these sentiments may be in both countries) seemed jarringly out of place.

South Korea, thus, faces the need to define its interests and shape its policies, mindful of its ample and growing stake in long-term relations with China, while remaining able to define its own course apart from overt Chinese pressure. There is a profound difference between close links to China and being overly enveloped in Beijing’s strategies, without full attentiveness to Korea’s interests and needs. Success in realizing these multiple goals will be the ultimate test of the viability of a bridging strategy, on which Korea’s security and well-being clearly depend.

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Robert A. Kapp is senior advisor to the China Program at the Carter Center. He has been principal of Robert A. Kapp and Associates, a business consulting firm, since 2004. From 1994 through 2004 he served as President of the United States-China Business Council…